Most CEOs 'aren’t doing anything' to address tech megatrends
Need to be more hands-on in looking into it and not just delegate
MANY chief executive officers (CEOs) are still clueless about how technology megatrends could have an impact on their companies in the long-term, said business research and consulting firm Frost & Sullivan.
According to its chairman David Frigstad, about 98% of CEOs he spoke to simply “just don’t know what to do” when comes to dealing with megatrends such as the Internet of Things (IoT), smart cities, big data and others.
“They know the future is big, they know it’s dangerous, and they know it’s changing,” Frigstad told Digital News Asia (DNA) on the sidelines of the Growth, Innovation & Leadership (GIL) 2014: Malaysia Congress in Nusajaya, Johor on April 15.
“Most CEOs aren’t doing anything. They ignore it, they don’t know what to do, and they say they have a long-term plan, but the long-term plan is usually financial projection," he added.
Frost & Sullivan is not the only research and consulting firm that expects trends like IoT and big data to grow exponentially over the near to medium term.
According to Gartner Inc, IoT -- which excludes computers, tablets and mobile phones -- will grow to 26 billion units installed by 2020, versus 900 million units in 2009. It also expects IoT product and service suppliers to generate over US$300 billion in business in 2020, resulting in US$1.9 trillion in global economic value-add.
As for big data trends, IDC predicts that the Asia Pacific big data market will grow to US$1.76 billion in 2016, compared with US$258.5 million in 2011, representing a compounded annual growth rate of 46.8%.
Frigstad cited Eastman Kodak Company as one example of how a trend (in this case, digital photography) can hurt a company, and also how Fujifilm took advantage of the trend.
During the 1980s and 1990s, Kodak continued to focus and invest in film-based technologies while Fujifilm shifted its resources to the new but unproven digital technology. By 2003, Fujiflim had 5,000 digital processing labs in the United States while Kodak had fewer than 100.
In 2012,Kodak filed for Chapter 11 bankruptcy protection in the United States and had to sell many of its patents for approximately US$525 million as part of its measures to emerge from bankruptcy.
Frigstad (pic) also urged CEOs to be more hands-on and to play a bigger role in addressing concerns about the impact of megatrends.
For a start, he suggested the CEO set up a think-tank and ensure he or she was closely involved with the think-tank, whose sole purpose would be to provide input on research, ideas , business models and technologies.
The think-tank would also need to create scenarios of the future, on how a particular trend could affect the company, its customers and the industry.
“CEOs also need to pull their management team together, sometimes with clients, and really take a deep dive on what the future may look like.
“These visionary scenarios would need to be communicated to the board, and the management team. Most importantly, the CEO needs to be hands-on. It is not something he delegates,” said Frigstad.
“What I see in the great CEOs is that they are doing it themselves -- they live in the future, and they invest in the future,” he added.
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